Milwaukee Biz Blog

Northwestern Mutual Life Insurance Company Inc. announced Wednesday it plans to purchase a 153,720-square-foot office building at 733 N. Van Buren St. in downtown Milwaukee. The company has entered into a contract to purchase the building, but the deal has not closed yet.

The sale price was not disclosed. The building has an assessed value of $4.5 million, according to city of Milwaukee records.

The building is located across the street from NML’s corporate headquarters.

This fall the company announced that it plans to tear down a 16-story, 451,964-square-foot office building on its downtown Milwaukee campus. The company said the building, which houses 1,100 employees, is safe but has significant ongoing maintenance needs.

NML has indicated that it will replace the building with a new building downtown, a new building at its Franklin campus or a combination of the two. The company has met with city of Milwaukee and Franklin officials about its plans.

Some downtown Milwaukee supporters are worried that the company will decide to build in Franklin to take advantage of lower costs there. The loss of about 1,100 Northwestern Mutual employees would be a blow to downtown.

If the company decides to build a new building downtown on the same site as the building that it plans to tear down, it would have to find a place to temporarily house those employees. Otherwise the company could build a new building in Franklin and move the employees there once it is complete.

The purchase of the 733 N. Van Buren Street building gives NML the flexibility to house the employees from the building that will be demolished and while replacing it with a new building, if that is what it decides to do. The company said it could house 1,000 employees in the Van Buren Street building and its other buildings downtown. The remaining 100 employees could be moved to the Franklin campus.

“For now this transaction simply provides the space we need so that we can get people situated and work can continue uninterrupted during the demolition process,” said Tim Gerend, vice president and leader of NML’s long range campus planning effort. “We are a long way from knowing where buildings and people will ultimately be located. We’re looking forward to creating modern, efficient and flexible space that can support our business and employees for decades to come. We are at the start of a very exciting process to create a 21st century work environment that will allow us to better serve our policyowners and financial representatives.”

Some downtown commercial real estate executives say that NML’s purchase of the 733 N. Van Buren Street building is a good sign that the company will decide to build its new building downtown.
“I don’t think they were ever planning on leaving downtown,” one commercial Realtor said. “I don’t think the Franklin thing is real.”

“I think they are further along (with plans for the new building) than they let on,” a construction industry executive said. “I think that piece of property (where NML’s downtown headquarters sits) is so amazing they would be stupid to not put something on it.”

However, Joel Lee, the owner of Van Buren Building Company, which is selling the 733 N. Van Buren St. building to Northwestern Mutual, said he doubts the company has made up its mind about where to build a new building, and says people shouldn’t read too much into the company’s plans to purchase the building.

“I don’t think anybody can surmise anything,” Lee said.

Northwestern Mutual has been a major tenant in the building for years, moving employees in and out when overflow space is needed, Lee said.

NML planned to make significant use of the building as it replaces the downtown building, so it made more sense to just sell the building to them, he said. Constant moving activity in the building would be detrimental to other tenants, Lee said.

After it builds its new building NML could still use the 733 N. Van Buren St. building to accommodate future growth, the Realtor said.

Lee said he has no idea what NML will decide to do but, “they are committed to the city of Milwaukee. They’ve told that to me a dozen times in meetings.”

Andrew Weiland is managing editor of BizTimes Milwaukee.

While local communities sift through their budget numbers, it remains critical for each municipality to keep its future on the drawing board. Thoughtful planning, more than just prudent practice, is necessary to identify the needs of a community and shape the local economy in municipalities throughout Milwaukee County.
In the midst of economic uncertainty, it is encouraging to see local communities pursue new initiatives. 

Projects in Shorewood, Whitefish Bay, Brown Deer, West Allis, Greendale, St. Francis, Oak Creek and Greenfield demonstrate a strong commitment to future growth, and the success of these projects, which involve parks, main streets, and mixed-use development, prove integral to the economic health of each community individually as well as the greater metropolitan area as a whole.

Milwaukee-based GRAEF has experienced firsthand the outcomes of successful municipal planning. This year, GRAEF celebrates 50 years of experience in contributing to southeastern Wisconsin’s urban landscape by developing, and in many cases implementing, municipal development plans for Wisconsin municipalities.

Through our experience, we have learned that each municipality has unique needs and a specific urban landscape to work with. Although the outcome of the municipal planning process differs from one municipality to another, there are core best practices that can guide any governing body through this process. Communities with the most successful planning projects reflect three key attributes: public support for an achievable vision; technical expertise to make the transformation; and long-term commitment to ensure implementation. 

Proper planning and vision help a community support projects that generate revenue, and avoid those with long-term pitfalls. This planning includes study of the cost and revenues associated with envisioned projects like parks, streetscapes, town squares or retail development as well as evaluation of the project’s market feasibility. Proper planning can also lead to the creation of regulations that incentivize good investments while stopping unwanted projects. Good plans help a community support projects that generate revenue, and avoid those with long-term pitfalls.

The City of Milwaukee and the many municipalities that surround it compose one economic community. On a daily basis, residents and visitors move throughout the county from one city or village to another in order to work, attend school, shop, obtain medical care, or see a movie. Thus, the success or failure of one community affects the region’s overall success and quality of life.

Now more than ever we must focus on creating and implementing plans that can guide growth, revitalization and economic development in southeastern Wisconsin, and position our local communities, county and state for success. 

Lawrence Witzling is a principal at GRAEF, a national engineering and planning firm headquartered in Milwaukee. He also is a professor at the University of Wisconsin-Milwaukee’s School of Architecture and Urban Planning.

Early this year, I sent out a LinkedIn blast wishing everyone in my network a happy and prosperous New Year .My theme for my 2011 remarks was” Expect the Unexpected.”

Little did I realize at the time how this might affect me personally.

On Feb..2, 2011, the day of the big blizzard in town I suffered a heart attack while snow blowing (Ironically I was across the street with my son helping my recently widowed neighbor get out of her house!)

Events of this nature have a way of getting your attention, and luckily with an angel by my side and some wonderful care at St Luke’s Medical Center, I’m back up and running and feeling excellent.

As I recovered, I had a lot of time to ponder and learn from what had just occurred. I also had time to watch with fascination what was unfolding in the Capitol.

Anger is a pretty destructive emotion. It can make normal people crazy, cloud good judgment and as I learned during my cardio rehabilitation classes, it can adversely affect one’s health.

The head is directly connected to the heart… (which is good) but that close relationship can put an inordinate amount of stress on the heart.

Back to the Capitol drama.  Some folks got a little carried away .Emotions ran high, and blood pressures surely followed!

I watched with fascination how invested each side was and how things degenerated so quickly. Not a lot of respect and honest communication was demonstrated by either side.

Being a child of the sixties, I also heard in my head the chant, “The whole world is watching.”

So my point is this. Life is very precious…you never know when it will be taken away ….so you need to put things in the proper perspective.

For me personally, I now enjoy a lot of the little things in life we all are guilty of taking for granted:

• A smile or a good laugh with your son/ daughter/ spouse or co worker.
• Surprising an old friend with a phone call.
• A chance encounter with a little fawn on the bike trail.
• A heartfelt hug from someone who just learned you are OK.

For all those heavily invested in the politics of the moment, I’d suggest…Put things in perspective, show respect for others’ opinions (even though you may have different ones) and listen.

I truly believe the system is designed to reflect the wishes of the people.

If you don’t like what your government officials are doing….you can change them out.
No shots will be fired or people slaughtered in the streets, ala the recent Middle East events.
Our Democratic free enterprise system has worked in the past and will serve us well in the future.
I wouldn’t want to live in any other country on the face of this planet for the rest of my life..or better said…my second life.

What’s truly important is that we all pass the final exam.

That exam has two simple questions: Did you give more than you received? Did you leave this earth a better place than when you arrived?

I received a great gift from my traumatic personal health event

From my perspective, I intend to make sure I pass the final exam with an A+.

Gary Billington is vice president at Plunkett Raysich Architects LLP in Milwaukee.

Sometimes, the system works against the greater public good, and well-intended projects get sidetracked or even derailed. Then there are those other times, when the system works exactly like it’s supposed to work, and the right thing gets done in the end.

The latter may very well be the case today when the Milwaukee Common Council voted to approve a proposed $50 million, 200-room Marriott hotel project in downtown Milwaukee.

In the end, all of the parties involved in the controversial project acted in their own self-interests, and in the end, the council did the right thing.

The developers for the Marriott project, Jackson Street Management LLC, acted in their self-interests by proposing the project at the southwest corner of Wisconsin Avenue and Milwaukee Street.

The Milwaukee Historic Preservation Commission did its job by demanding the developers alter their proposal to preserve the facades of the buildings on Wisconsin Avenue. The commission went a step further and demanded the facades on Milwaukee Street be preserved and that the hotel plan be changed to include 15-foot setbacks.

The developers reacted in their own self-interests by refusing to preserve the unremarkable Milwaukee Street facades and refusing to concede to the setbacks.

Some people suggested that the members of the Historic Preservation Commission be removed by the mayor, who disagreed with the very people he had appointed. However, to do so would have completely neutered the commission’s role in the process and rendered it useless.

Meanwhile, The Marcus Corp., owner of the nearby Pfister Hotel, acted in its self-interests by protesting that new hotel developments should not receive public subsidies to create competition for existing hotels.

Greg Marcus, chief executive officer of the venerable Milwaukee company, raised a very legitimate concern: “If we are going to get more rooms, how are we going to fill the rooms? That’s the question. What’s the game plan?”

The council then weighed the concerns from the preservationists and The Marcus Corp. against the 350 to 450 temporary construction jobs and 175 to 200 full-time permanent jobs to be created by the new hotel.
In the end, a super majority of the council approved the project.

In the end, there was no Jewish “cabal” that stopped the project, as one talk radio blowhard had opined.

And in the end, the new hotel will be built in downtown Milwaukee. Now, it’s up to the rest of us do what we can to grow the region to create the demand to justify that hotel’s existence.

Steve Jagler is executive editor of BizTimes Milwaukee.

It is my firmly-held opinion that the ongoing bureaucratic drama related to the proposed $50 million downtown Marriott hotel project is “Exhibit A” as to what is out of whack with the city’s Historic Preservation Commission.

In fact, I plan on introducing legislation next week that would allow the Common Council to review the role, procedures and powers of the Historic Preservation Commission.

Why is this review necessary?

By its actions the commission is essentially delaying and preventing the city’s duly elected legislative body – the Common Council – from taking action on the important Marriott proposal. The delay has been harmful to the viability of the project, and the project’s developers certainly don’t deserve to have obstacles thrown in their way by appointed members of the commission. They do deserve thoughtful consideration from the elected members of the Council.

The commission has an advisory role and needs to make sure it fulfills that role. But, the panel should not have the power to hold up hugely important economic development projects such as this one. No other such city board or body has the authority to supersede the role of the Council, and neither should the commission.

For the record, my legislation seeks a thorough Council review of the administrative rules and procedures used by the commission. Such a review could lead to changes in how the commission conducts its business, or it could even lead to the abolishment and recreation of the body.

The Historic Preservation Commission will discuss the Marriott proposal when it meets at 4 p.m. Monday, Jan. 10, in room 301-B, City Hall, 200 E. Wells St.

Alderman Terry Witkowski represents Milwaukee's 13th District.

Two Milwaukee development opportunities, the use of vacant MPS buildings and the proposed downtown Marriott hotel, generated media interest last week. I continue to support City control of vacant MPS buildings. In fact, I introduced the measure in my 2011 City Legislative Package which was presented to and passed by the Common Council on November 23rd. When I met with Governor Walker in mid-December, we discussed empty MPS buildings and charter schools. I also laid the groundwork with legislative leaders during meetings that same day.

The City can manage the disposition of the buildings. It’s a real estate management and disposition approach. MPS will have ample time to determine the school system’s needs for any particular building.
The sale to either charter or choice interests will be permissive, not mandatory. The City may have an interest in a specific property for neighborhood development and/or redevelopment purposes. I want vacant MPS buildings to be neighborhood assets.

Since 1989, the City has provided $182 million to MPS in borrowing authority for school building improvements. Our City tax levy cost for this in 2011 alone is $12.2 million. In an effort to balance our capital needs and priorities, I eliminated this program a few years back.

If the City gains control over building sales via legislation, I would advocate for sales proceeds to be used to help pay down the levy-supported debt we have incurred on MPS’ behalf.

Last Thursday, developers introduced a new, compromise design for the proposed downtown hotel that they will present to the Historic Preservation Commission for review today. I urge commission members to act on this matter and keep the process moving. We need to send the message to developers that reasonable ideas move forward in Milwaukee.

I support this project because it’s about jobs, economic development, the future of Wisconsin Avenue, and a better environment for people to come downtown and to do business.

Five years from now, I do not want to be on the corner of Wisconsin Avenue and Milwaukee Street looking at the same underutilized storefronts. Five years from now, I want to stand at that intersection and say look at all the people who work here.

This project is consistent with my vision for a vibrant and exciting downtown Milwaukee where we are making a successful effort to bring new energy and new private-sector investment to our major commercial area so that we can grow and thrive as a community. This is a big shot in the arm for downtown Milwaukee, and it is a project that should move forward.

This is the type of project that I want to see more of for Milwaukee. City government will continue to work with the private sector to attract these types of developments to our community.  

Regrettably, not all old buildings can be saved, and we have to make way for the future. When buildings have significant historic value and it is practical and affordable to redevelop them, historic preservation should be pursued. That's not the case here, and we should move forward so we enhance downtown, grow the tax base and generate jobs. It's certainly a better alternative than leaving empty buildings that contribute very little to our community.

I can respect that some others may have a different point of view. That's OK, because that's what democracy is all about. But this is a great project for Milwaukee, and I thank Dean Greenstreet of UWM’s School of Architecture and Urban Planning for working with the developers on this compromise design.  

Tom Barrett is mayor of Milwaukee.

Milwaukee has a well-deserved reputation for preserving historic buildings, but the urge to preserve is beginning to stand in the way of much-needed downtown revitalization.

A proposed 200-room Marriott Hotel, entirely privately financed ($50 million) at Wisconsin Avenue and Milwaukee Street, would wrap around the historic building at the southwest corner of that intersection. Historic and modern architecture would coexist and downtown Milwaukee’s major thoroughfare would get a much-needed shot in the arm. One could reasonably expect new businesses to spring up along East Wisconsin Avenue and in the empty buildings adjacent to the Marriott’s main entrance on Milwaukee Street.

Standing in the way of this home-grown project are three buildings – one on Wisconsin and two on Milwaukee. If age is the only requirement for a historical building, they are historical, They do not, however, have any historical significance and they have been empty or underused for many years. In fact, they stand in morning shadow of the very modern 411 building, which replaced the truly historic retail headquarters of T.A. Chapman.

Here’s the situation as we see it:

• The “old” buildings, that will not be missed after the hotel is completed, contribute $100,000 to the city’s tax base. They also add significantly to the decaying appearance of what was once one of America’s premier downtowns. They are and have been for some time less than 50 percent occupied (the only two current tenants are a used book store on Wisconsin Avenue and a bar on Milwaukee Street).
• The new Marriott, which could break grown early next year, would pay an estimated $2.26 million in taxes, would require 350-450 construction workers and would result in 175-200 full-time jobs when completed. While 200 rooms would not bring downtown Milwaukee to the level where it could support a major convention or trade show, it would be a start. It would complement the nearby Pfister Hotel and Hotel Metro, support existing restaurants and retailers and spur new ventures to open in historic and less than historic buildings on the east side of downtown Milwaukee.
• Key Milwaukee is the only monthly visitor guide in the metropolitan area, with two websites and social media programs dedicated to serving the needs of leisure and business travelers. Those travelers need more lodging opportunities downtown. We agree with leaders of the Wisconsin Center District and Visit Milwaukee, who have long argued for additional hotel rooms to support a growing tourism industry and attract major conventions and trade shows.

Unfortunately, many developers in recent years have proposed facilities that required public support at a time when municipal funds are strained. The new Marriott is a rare exception. Jackson Street Management LLC is a local developer, asks no public funds and even plans to use Milwaukee’s Kahler Slater Architects.

It should be a no brainer for Milwaukee’s leaders. If the city’s Historic Preservation Commission rejects the hotel proposal, Mayor Tom Barrett, Common Council President Willie Hines and Alderman Robert Bauman need to bring an to end the hysteria over three “old” and little-used buildings and push this project through the Common Council. It could mark the start of a rebirth of activity in downtown Milwaukee.

Roger Stafford is associate publisher of Key Milwaukee and KeyMilwaukee.com.

Too bad Governor-elect Scott Walker was not in attendance to hear Mac Holladay address Madison-region leaders at Thrive’s annual meeting. (Thrive is the eight-county regional economic development effort paralleling Milwaukee 7.)

Holladay led successful state-level economic development efforts for Georgia, Mississippi and South Carolina. His firm, Market Street, has helped cities from Austin to Nashville to Sioux City successfully accelerate economic growth.

“It all starts with talent attraction,” Holladay shared in listing key economic development factors. Indeed, Site Selection’s annual survey of corporate real estate executives reveals that the No. 1 location factor is workforce skills.

This is why the Milwaukee-Madison (and eventually Minneapolis/St. Paul) train is the lowest hanging, juiciest economic development fruit within our reach.

It’s a once-in-a-lifetime-game changer that would dramatically and positively expand the size of our cities’ labor sheds as well as bring more people to our state to live, play, vacation, work and start a business.

If you reject my argument, here’s a different argument. Sit down with your CFO and do the cash flow math related to Walker’s decision:

• Cancel the train and Wisconsin is in the red for $14.25 million (cancelled contracts) plus $83.4 million (upgrades to Milwaukee line the state must now pay for which would have been financed by the federal government).
• What do we save by canceling the train? A $7.5 million annual state subsidy, according to Walker; $750,000 according the Wisconsin DOT.
• Without discounting and using Walker’s estimate, it will take 13 years before saving the subsidy works to Wisconsin’s benefit. Use the Wisconsin DOT estimate, and payback on canceling the train runs to 130 years.
• In other words, Walker’s refusal to accept federal funds for the train puts us in the red for at least seven years based solely on cash flow. If I added in the economic impact of the 415 jobs lost immediately and the 5,500 jobs that will never be created during the train’s construction and the economic impact of larger labor pools, Walker’s math never pays off.

The election is over. We got the “pro-business” guy into office. Do the math. Finally, think about how you’ll find a workforce to replace all your retiring skilled and professional workers.

Tell Walker to get on the jobs train.  Otherwise, the rest of the Midwest is leaving the station without Wisconsin.

Kay Plantes is an MIT-trained economist, business strategy consultant, columnist and author. She served as chief economist for former Wisconsin Republican Gov. Lee Dreyfus. Plantes provides expertise in business model innovation, strategic leadership and smart economic policies. She resides in Madison, Wis., and Oslo, Norway.

Editor’s note: U.S. Congresswoman Gwen Moore (D-Milwaukee) wrote to Wisconsin Gov. Jim Doyle and Governor-Elect Scott Walker after the decision to temporarily stop work on Wisconsin’s high-speed rail project. In an ongoing effort to provide multiple viewpoints about the high-speed rail issue, the text of Moore’s letter follows as today’s Milwaukee Biz Blog entry.

Dear Governor Doyle and Governor-Elect Walker:
It is critical that Wisconsin continue work on the high-speed rail line from Milwaukee to Madison that will eventually connect to the Twin Cities in Minnesota.
Offering more options to connect people to their jobs is an economic win-win for our state. This is especially true for low-income people, many of whom have no viable transportation option and can’t get to where the jobs are. And as part of the vision of a nationwide high speed rail network, the economic benefits to our state will be plentiful.
In Milwaukee, Talgo will create jobs building cars for high speed rail.  They will build cars for rail in Oregon, and they should be able to build rail cars to be used in Wisconsin as well.  Stopping work on the project puts these jobs in great jeopardy. 
This is about our future, not about our past.
We all share the same goal of creating good jobs for Wisconsinites.  The election is over, and this shouldn’t be about politics.  It should be about people and family-supporting jobs.  Undoubtedly, building a high speed rail line creates jobs.  And more jobs will come once it is operational.
Furthermore, the truth remains, if the funding isn’t used in Wisconsin for high-speed rail, the funding will not be used in Wisconsin at all.  Sending this funding back is misguided and does nothing to help Wisconsin taxpayers.  If anything, it sends their money away to build high-speed rail somewhere else.
As it stands today, Wisconsin gets less back from the Federal government than Wisconsinites pay in Federal taxes.  Sending $810 million back to Washington only makes this worse. 

Sincerely,
Gwen Moore
Member of Congress

A lot can happen to a city’s real estate in a decade. Think of the past 10 years, when the Milwaukee Art Museum, Miller Park, the Milwaukee Public Market, the University Club and Kilbourn Towers virtually redefined Milwaukee’s skyline.

Condominiums boomed in the Historic Third Ward. The Park East Freeway came down. Manpower Inc. moved its headquarters downtown. The Pabst Brewery site is being reborn.

What will the next decade bring? How will Milwaukee live, work and play in the year 2020? And how will those factors shape commercial real estate development in the region a decade from now?

Those are the questions to be explored by the panelists at this year’s BizTimes Commercial Real Estate & Development Conference, which will take place Thursday, Nov. 11, at the Potawatomi Bingo Casino. The public is invited to attend the breakfast event. For additional information, visit www.biztimes.com/creconference.

The featured panelists at the conference will include:

• Mark Eppli, professor and Robert B. Bell Sr. Chair in Real Estate at Marquette University. Eppli will discuss the demographics of Milwaukee in 2020. Who will we be as a people? What will be our racial, generational and economic makeup? How many of us will be living in the suburbs? How many of us will be retired? What will be our income levels? How will all of these factors change economic development and commercial real estate development?
• Rocky Marcoux, commissioner of the Milwaukee Department of City Development. Marcoux will provide us a sneak peek at downtown Milwaukee in 2020. What will become of the Bradley Center? The Shops of Grand Avenue? The Park East Corridor? O’Donnell Park? The Summerfest grounds and the Third Ward? Will the condo market be revived? What will be the city’s downtown priorities in the next 10 years? Will the streetcars get done, and if so, how will they change economic development patterns? Will the city be successful in creating a water industry cluster?
• Tom Rave, executive director of the Airport Gateway Business Association. Rave will discuss the emerging aerotropolis development around Milwaukee’s General Mitchell International Airport. He also will share his insights about the transportation infrastructure that southeastern Wisconsin will need in 2020 to compete in a global marketplace and the need for a mobile workforce – with or without high-speed rail.
• Andrew DeGuire, vice president of strategy and acquisitions, Johnson Controls Inc. DeGuire will discuss how commercial buildings will be constructed and re-equipped by 2020. How will they be heated? What technologies will by then be commonplace and readily available? Will solar energy be widely feasible by then? How will our buildings be powered? What kind of vehicles will we be driving? How will they be fueled? How are all of these technologies going to change economic development patterns?
• Jill Morin, chief executive officer of Kahler Slater Inc. Morin will provide the bookend to Eppli’s demographic presentation. She will account for the human factor. What will the consumer trends be in 2020? How will we live, work and play? How will commercial buildings reflect and accommodate who we are? What kinds of jobs will we be doing? How will the workplace be different?

Each of these panelists brings different skill sets, backgrounds and viewpoints to the discussion.
A companion publication, the BizTimes Commercial Real Estate Book, will be published along with the event. Highlights of this publication will include coverage about the deals of the past year, commercial real estate vacancy charts, a Commercial Association of Realtors Wisconsin (CARW) membership survey, the annual Honor Roll of Prime Leasable Space and a collection of “signs of life” in the local commercial real estate market.

Steve Jagler is executive editor of BizTimes Milwaukee.